Sustainable Africa Scenario to achieve energy development goals

AFRICAN ENERGY

SUSTAINABLE AFRICA SCENARIO to achieve energy development goals

The Africa Energy Outlook 2022 explores a Sustainable Africa Scenario in which all African energy-related development goals are achieved on time and in full. This includes universal access to modern energy services by 2030 and the full implementation of all African climate pledges.

With demand for energy services in Africa set to grow rapidly, ensuring affordability is an urgent priority. Increased energy efficiency is essential for this, since it reduces fuel imports, eases strains on existing infrastructure, and keeps consumer bills affordable.

Renewables: the backbone of Africa’s new energy systems

Expanded and improved electricity grids provide the backbone of Africa’s new energy systems in this scenario, and are increasingly powered by renewables. Africa is home to 60% of the best solar resources worldwide, but it currently holds only 1% of solar PV capacity. Already the cheapest source of power in many parts of Africa, solar is set to outcompete all other sources continentwide by 2030. Renewables – including solar, wind, hydropower and geothermal – account for over 80% of new power generation capacity added by 2030 in the Sustainable Africa Scenario.

While renewables are the driving force for Africa’s electricity sector this decade, the continent’s industrialisation relies in part on expanding natural gas use. More than 5 000 billion cubic metres (bcm) of natural gas resources have been discovered to date in Africa that have not yet been approved for development. These resources could provide an additional 90 bcm of gas a year by 2030, which may well be vital for Africa’s domestic fertiliser, steel, cement and water desalination industries. Cumulative CO₂ emissions from the use of these gas resources over the next 30 years would be around 10 billion tonnes. If these emissions were added to Africa’s cumulative total today, they would bring its share of global emissions to a mere 3.5%.

Africa’s vast resources of minerals that are critical for multiple clean energy technologies are set to create new export markets but need to be managed well, with Africa’s revenues from critical mineral exports set to more than double by 2030.

A number of low-carbon hydrogen projects are under way, focused primarily on producing ammonia for fertilisers, which would strengthen Africa’s food security. Africa has huge potential to produce hydrogen using its rich renewable resources. As much as today’s energy demand could be produced at internationally competitive price points by 2030.

Achieving Africa’s energy and climate goals means more than doubling energy investment this decade. This would take it over US$190 billion (R3.16 trillion) each year from 2026 to 2030, with two-thirds going to clean energy.

According to Birol, multilateral development banks must take urgent action to increase financial flows to Africa for both developing its energy sector and adapting to climate change. “The continent’s energy future requires stronger efforts on the ground that are backed by global support. The COP 27 Climate Change Conference in Egypt in late 2022 provides a crucial platform for African leaders to set the agenda for the coming years. This decade is critical not only for global climate action but also for the foundational

AFRICAN ENERGY

It is morally unacceptable that the ongoing injustice of energy poverty in Africa isn’t being resolved when it is so clearly well within our means to do so.”

investments that will allow Africa – home to the world’s youngest population – to flourish in the decades to come.”

Challenges affecting Africa’s energy development

According to the International Energy Agency (IEA), crippling spikes in energy prices underscore the urgency and the benefits for African countries of accelerating the scale up of cheaper and cleaner sources of energy.

Russia’s invasion of Ukraine has sent food, energy and other commodity prices soaring, increasing the strain on African economies already hard hit by the Covid-19 pandemic. The overlapping crises are affecting many parts of Africa’s energy systems, including reversing positive trends in improving access to modern energy, with 25 million more people in Africa living without electricity today compared with before the pandemic, according to the Africa Energy Outlook 2022.

At the same time, Africa is also already facing more severe effects from climate change than most other parts of the world – including massive droughts – despite bearing the least responsibility for the problem. Africa accounts for less than 3% of the world’s energy-related CO₂ emissions to date and has the lowest emissions per capita of any region.

Despite these challenges, the report finds that the global clean energy transition holds new promise for Africa’s economic and social development, with solar, other renewables and emerging areas such as critical minerals and green hydrogen offering strong growth potential if managed well. Increased international ambitions for cutting emissions are helping to set a new course for the global energy sector amid declining clean technology costs and shifting global investment patterns. African countries are poised to benefit from these trends and attract increasing flows of climate finance.

“Africa has had the raw end of the deal from the fossil-fuel-based economy, receiving the smallest benefits and the biggest drawbacks, as underlined by the current energy crisis,” says Fatih Birol, executive director, IEA. “The new global energy economy that is emerging offers a more hopeful future for Africa, with huge potential for solar and other renewables to power its development – and new industrial opportunities in critical minerals and green hydrogen.

“The immediate and absolute priority for Africa and the international community is to bring modern and affordable energy to all Africans – and our new report shows this can be achieved by the end of this decade through annual investment of $25 billion (R416.5 billion) – the same amount needed to build just one new LNG terminal a year,” Birol added. “It is morally unacceptable that the ongoing injustice of energy poverty in Africa isn’t being resolved when it is so clearly well within our means to do so,” he concluded.

Follow the link to access the Africa Energy Outlook 2022 report: tinyurl.com/AEO2022

6 September 2022

In person at: Country Club Johannesburg and Online

Resources for Africa is pleased to announce the 2022 Hydrogen Economy Discussion taking place on 6 September at the Country Club Johannesburg, Auckland Park.

Hydrogen’s unique properties make it potentially a powerful enabler for the global energy transition as we seek to diversify energy sources, fast track the route to net zero and benefit the energy system, consumers and hard-to-abate sectors such as transportation and heavy industry. In South Africa the discussion has centred around the opportunities for the country to become a leading player in the global hydrogen economy, given its unique position as the world’s largest producer of PGMs and its huge potential for renewable energy production.

Brought to you by Resources for Africa, the organisers of the Joburg Indaba, this comprehensive full-day discussion will bring together all the key players, including hydrogen project developers, mining companies, investors, industry associations, hydrogen equipment suppliers, infrastructure providers and independent advisors, to debate the implications and opportunities of the hydrogen economy globally and particularly for South Africa and the mining industry.

Key subjects that will be focused on include: • What is the potential role of hydrogen in the energy transition and achieving net zero? • What is South Africa’s plan to take advantage of the hydrogen economy’s potential? • What is the real potential for PGMs in the hydrogen economy? What production, storage and distribution infrastructure is needed to enable the hydrogen economy? • What opportunities exist for local and international funders to invest in the green hydrogen economy? • What regulation, policy and standardisation initiatives are needed to enable the hydrogen economy? • Who is developing green hydrogen projects in Africa and elsewhere and for which applications? • And so much more…

Hydrogen Economy Discussion 2022 is proudly sponsored by: